US Decoupling From Rest of the World?
U.S. rallies in February, rest of the world lags. Decoupling? I dislike this word, since global trade is now so important — but you have to wonder.
What do you think of this stat? The S&P 500 is up 1.5 percent in February, a traditionally weak month. It's up fractionally for the week.
Much of the rest of the world is behind. Way behind: Brazil down 3 percent; Mexico down 3.1 percent; Germany down 1.7 percent; Spain down 1.5 percent; Hong Kong down 1.2 percent; and Canada down 0.6 percent.
What's going on? "I think the power of U.S. investor sentiment has been our best export," one trader quipped to me.
1) Nothing out of the G-20 meeting yet, waiting for a draft statement ... they will criticize protectionism, advocate open markets, and competitive devaluations — just don't expect them to call out Japan directly.
2) Stock mutual fund inflows: Slowing down? According to Lipper, stock mutual fund inflows were up for the sixth straight week, with inflows of $2.395 billion. Two caveats: This is a lower number than in the prior weeks, and the inflows of $3 billion into international stock funds was offset by an outflow of $617 million from domestic funds. Exchange-traded stock funds had outflows, as well.
3) As gold has dropped to six-month lows, there has been a small but noticeable increase in redemptions from gold ETFs. The SPDR Gold Trust (GLD), the largest of the gold ETFs, saw outflows of $368 million in the last week. This is only about 0.5 percent of the market value — a relatively small amount — but it has been adding up. Year-to-date, there have been outflows of $1.5 billion.
4) Nasdaq OMX announced it would soon begin processing trades at 4 a.m. ET, up from their previous 7 a.m. start time.
The NYSE Euronext response? "NYSE Arca and other electronic markets have been processing trades in the pre-market starting at 4 a.m. for many years," exchange spokesperson Rich Adamonis told me. "We really don't think it will make much of a difference in the pre-market."
Trades — both NYSE and NASDAQ-listed — have been able to be processed on NYSE's electronic exchange, Arca, at 4 a.m. since 2005.
Will the NYSE open even earlier than 4 a.m.? Don't count on it. There is not a lot of demand in the pre-market, on either Nasdaq or NYSE. NYSE officials tell me there is only an average of 35 million shares that trade pre-open; compare that to the roughly 3.5 BILLION that trades on the NYSE consolidated tape (all trading in all NYSE listed stocks) daily. Nasdaq may be hoping to capture some of that 35 million share flow, but it's a small number.
5) Look up! A 10-ton meteorite hit Siberia, injuring 500 ... an asteroid half the size of a football field got within 17,000 miles of earth today. (Nerd alert: A meteorite is a meteor that survives through the earth's atmosphere and strikes the ground).